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Rey Magana

From NAFTA to USMCA: How Mexico and LATAM are changing the Game for Pharma and Med-Device Companies

A Look at the Growing Market and Investment Landscape

Mexico - The New Hub for Pharma and Med-Device Companies in LATAM

Mexico has emerged as a hotspot for investment in the pharmaceutical and medical device industries, and for good reason. With a highly competitive and well-developed pharmaceutical market, Mexico is projected to reach over $13 billion USD in pharmaceutical sales by 2028. It's the second-largest economy in the LATAM region and the largest exporter, making it an ideal destination for foreign investment.



Attractive Investment Destination with Favorable Regulations:


As per the World Investment Report 2020, Mexico is the 8th most attractive investment destination worldwide and the second-largest destination for foreign direct investment in Latin America. With a network of free trade agreements providing preferential access to markets in 46 countries, including the US, Canada, and the EU, Mexico is a gateway to a vast consumer base. Low production costs are another attraction for foreign investors, with manufacturing costs estimated to be 17.1% lower than those in the US and the lowest among OECD nations.


Boost in Foreign Pharmaceutical Investment:


Foreign pharmaceutical companies have invested $3.2 billion USD in Mexico's pharmaceutical industry during the period of 2005-2014, with the US, Luxembourg, Ireland, Germany, and Spain being the major investors. The reason behind this boost in investment is primarily the low production costs in Mexico, which are significantly lower than those in the US and many other countries.


Presence of Major Pharma and Medical Device Companies:


Mexico has attracted more than 20 blue-chip pharma and medical device companies, including Johnson & Johnson, Bayer, Sanofi, Roche, Pfizer, Boehringer Ingelheim, Novartis, AstraZeneca, Merck, and GSK. Mexico is the leading exporter of pharmaceutical products in LATAM and the second-largest market for the pharmaceutical industry in Latin America. In 2020, Mexico exported $10.6 billion USD in medical instruments, ranking as the top exporter of medical devices in LATAM and the third globally.


US-Mexico-Canada Agreement (USMCA):


The US-Mexico-Canada agreement (USMCA) has replaced NAFTA, offering an improved regulatory framework and trading ease in the pharmaceutical and med-device market. It has facilitated an innovative environment by providing intellectual property protection and promoting research and development.

In conclusion, Mexico's highly developed and competitive pharmaceutical and medical device industries, coupled with its favorable investment environment, low production costs, and free trade agreements, make it a preferred destination for foreign investors. The presence of multinational pharmaceutical and medical device companies in the country, combined with its leading export status in these industries, further highlights Mexico's position as a crucial player in the region.

 

Looking to capitalize on this emerging market and expand your business? Download our report now to gain access to the latest insights and strategies for entering Mexico's pharmaceutical and medical device industries. Don't miss out on this opportunity for growth and innovation - contact us today to learn more!



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